COSATU’s response to the 2020/21 Mid-Term Budget Policy Statement

The Congress of South African Trade Unions (COSATU) has noted the government’s 2020/21 Medium-Term Budget Policy Statement tabled by the Finance Minister, Tito Mboweni in parliament today. While there are some positive policy proposals, the federation does not believe that the policy statement is bold and imaginative enough to extricate this economy from the doldrums and put it on sustained growth and development path.

This was a lacklustre performance by policymakers and it represents another missed opportunity. We are happy though that COSATU’s two proposals on Eskom Social Compact and the workers being allowed to tap into their retirement savings.

 We remain dismayed by Treasury’s reckless obsession with weakening the public sector. National Treasury’s rash cutting of expenditure in pursuit of a budget surplus by 2025 will not help the twelve (12) million workers to find jobs nor will it rebuild a collapsed state. The Presidential Economic Advisory Council itself argued against the suffocating of an already struggling economy

 We were hoping that Minister will give us more details on the implementation of the economic recovery plan announced by the President last week.  We wanted to hear more about timeframes, resources allocated, the impact upon jobs and growth, etc.  The speech unfortunately was very thin in this regard.  Some welcome references were made towards investing in housing, hospitals, ports, and digital spectrum but again with very little details. 

 The Minister had stated in February that Regulation 28 must be amended to allow for private sector investment in infrastructure, yet no movement has taken place.

 It is clear now that there is no plan to fight corruption and wasteful expenditure that consume on average R150 billion or 10% of the budget according to the Auditor General of South Africa.The MTBPS contains no new measures to address this cancer eating at the heart of the state. 

 We urge the government to implement the bold proposals that COSATU tabled at Nedlac which include banning Politically Exposed Persons and their families from doing business with the state, a transparent open online public procurement system for the entire state, centralised procurement of large items and rapid response anti-corruption courts.  The government’s lethargy in tackling corruption is inexcusable.

 Billions are being lost due to tax evasion and 95% of goods coming through our ports of entry are not inspected. About 65% of our imported goods are manufactured products and the government has no plan to build the capacity of SARS and stopping South Africa becoming a huge warehouse of cheap Asian goods.

 The President announced on 15 September that the UIF Covid-19 TERs would be extended in tandem with the disaster management restrictions.  This has not happened and it shows the indifference that government has for the workers.

 The extension of the R350 grant is a welcome relief but the chaos at SASSA needs to be fixed. Only R16 billion of the R200 billion Loan Guarantee Scheme has been dispersed seven months later. But sadly no new measures have been announced by Treasury and the banks to save this critical lifeline for the economy.

 COSATU is pleased that the Eskom Social Compact it drafted has been agreed to by government and business and will soon be signed by the President and social partners.  We need to move with speed to implement it.  Reliable and affordable electricity is essential to rebuilding the economy. It is deeply worrying, though, that government has not announced clear plans to fix our many distressed SOEs. 

 Much of workers’ expectations for the MTBPS rested upon the government having clear plans to save and turn around the bleeding SOEs. Unfortunately, the MTBPS has failed to set strict terms and conditions for the SOE’s to abide by. The SOE’s needs to be put on a tight leash because bailing them out is an unsustainable funding model. Whilst COSATU supports the additional financial support provided for these SOEs as they provide critical public and economic services bailouts are not a plan. 

 The Federation welcomes the announcement by the Minister that government has agreed to COSATU’s proposal to allow workers in distress or who have lost wages to access a portion of their pension funds.  This bill must be tabled in Parliament as a matter of urgency so that it can come into in effect by no later than 2021.  The Federation is pleased that workers’ concerns around compulsory annuitisation were addressed and a road map for comprehensive social security is being developed at Nedlac.

 Government needs to stop bullying public servants. One minute these workers are an essential service and are heroic frontline workers but when it comes to remuneration, they are treated as glorified slaves. It is these workers’ pensions that have built and are propping up this economy. The government must honour the 2020 wage agreement and engage in negotiations in good faith with workers on the next three-year agreement. 

 We accept the wage freeze of senior managers and politicians but any talk of a wage freeze for lowly paid public servants will be regarded as a direct attack on collective bargaining.

We will only take seriously the government when it reduces exorbitant salaries and perks of the executive and management at all levels of government; including scrapping the insulting perks afforded to the executive under the Ministerial Hand Book

 We demand they reduce the number of cabinet members, in particular, the number of Deputy Ministers and place all public sector entities and SOEs under the PSCBC so that there is one collective bargaining process.

 Workers have the right to be protected from inflation and to a living wage to take care of their families.

 The key to resolving the fiscal and debt crises is to stop corruption and wasteful expenditure, focus on diversifying and building the productive capacity of the economy fixing SOEs and dealing with tax evasion and illicit financial outflows.

 Issued by COSATU

 Sizwe Pamla (Cosatu National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080